Jon Grauman
speaker
142 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
Jon Grauman’s voice in public audio — every appearance, attributed to the second.
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So while they implemented this new policy to try to guard against steering, it simply created a different kind of steering, perhaps a worse kind. The second policy change that I would say is most significant is that buyers are now required to enter into a buyer agency agreement with their broker. Well, before buyers could go out there sort of using whomever they want.
They now need to have an established agreement with their agent, with their broker. And that agreement needs to state specifically how much that buyer's agent is going to make.
The sort of nonsensical part of this is that you're sitting down with a client, a buyer, to enter into the agreement and establish how much you're gonna make before you've identified a property and determine whether or not that property is offering a commission. So again, there's a lot about this that, in my opinion, does not make sense. I don't think it was particularly well thought out.
But what will happen is I'm sitting down with you. Okay, we're gonna go look for a house. We're gonna agree that my commission can be up to this amount because within the agreement, you can make less, but you can never make more. Right. So I have to set what the maximum amount is that I can make. Then we go out looking and it might take a week. It might take a month. It might take years.
And then we identify the property, determine whether or not they're offering a commission or a portion of the commission and who's paying it. It all gets sort of thrown into the pot now. That was like a big word sandwich I just threw at you. It was a lot of information, but that's the gist of it. We have to stop a few more times along the way, dot a couple more I's, cross a couple more T's.
Ultimately, we're getting to the same place. There's just so much misinformation. There's so many misnomers still out there that, you know, my approach to this right now is educate, don't defend, right? There's a lot of fear, but that fear can be alleviated with facts. So it's just a matter of explaining to people. Like I sit down with people and I go, well, I heard commissions are now negotiable.
Commissions have always been negotiable. That's not new. It's just that you read the sensationalized headline of an article but didn't go a little bit deeper. Or someone that says the commissions can't be financed. It's like, well, commissions can't be financed independently, but they've always been financed as part of the purchase price. That's why it's always been baked into the purchase price.
So again, it's a lot of just educating at this point.
Yeah, that's probably it, is that people just, that's, look, that was the basis of the whole case was this argument of collusion, that as an industry, we were holding the line saying the fee is X, 3%, 2.5%, and not saying the fee's negotiable, we charge X. That's the basis of the whole argument.
I'm actually not allowed to say it. Oh. That's the whole point, is that if I state it in any type of public forum or anything like that, then it could be argued that, again, they've made so many ridiculous arguments of collusion and so forth that, like... All I'm, I guess, legally allowed to say now is it's negotiable. Now, I can sit down with a private client and say, this is what my fee is.
This is what I charge. Right. Which I'll just share with you is just a standard like industry standard fee. No more, no less. And then we have to go approach the listing agent on each respective property and see what they're offering, which will oftentimes be tied to the merits of the offer. You make a good offer. We'll pay a commission. You make it. I say shit.
Great. Make a shitty offer. Then, you know, perhaps they're not going to be as amenable to paying your commission.
Customarily, historically, the commission has always been paid for in the past by the seller.
It could, sure. It absolutely could. So let's say that you have a homeowner, we'll call him Joe Schmo, and he's selling his house at 123 Main Street for a million dollars. And he says, you know what? I read this article the other day in, you know,
I was listening to this amazing podcast, and my takeaway was I don't have to pay commissions anymore, which, by the way, is the way a lot of people are hearing and reading this. Okay, so, Mr. Seller, that's true. You're not required to pay the commission. However... Let's look at what other listings are available in your market right now and whether or not they're offering a commission.
Because what you don't want to do is put yourself at a competitive disadvantage relative to what else is on the market. Now, if you don't want to pay the commission, that's okay. Again, that's your prerogative. But commissions have always been baked into the purchase price. So if you're not willing to pay, let's say, 2.5%, which would be $25,000 on that million-dollar sale...
then the offer may come in at 975 because the buyer now has to pay that fee directly to their broker. So if you're not covering it, they're going to. In other words, you pull one lever, you pull one down, the other one goes up, it's all connected. You're paying for it somehow. this all works out fine as long as everyone's rowing in the same direction.
Meaning as long as everyone understands that basic principle that like it's being paid for one way or another, then it's fine. It's when a seller says, well, I'm not paying for it and I still want my million dollars for the house. It's like, boom. Look, Joe, Joe, come on, Joe. I mean, look, I get people want what they want. You know, my daughter wants a pony.
That doesn't mean she's going to get one. Like people just need to understand the basic sort of principles and concepts of how this has worked because there's a reason behind it. But, you know, this notion that like, well, the buyers have to pay commissions now. The buyers have always paid commissions.
Sellers are technically the ones that maybe distribute it, but the buyer is the only one that comes to the table with money at the closing. So technically, it's actually the buyer that's paid it. And the buyer has been able to finance it because it's baked into the purchase price and because they're borrowing a percentage of the purchase price.
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